Jeff Dennes: Mobile Banking Pioneer, iPad Enthusiast

As the architect of USAA's online and mobile banking initiatives for the past 10 years, Executive Director Jeff Dennes rolled out a series of technology innovations for these channels. Although Dennes recently left the company, an iPad app he spearheaded is due out late this year.

Ed. Note: Since press time, Jeff Dennes has left USAA for a new assignment.

How quickly does Jeff Dennes, executive director at USAA and overseer of the financial services firm's online and mobile channels, react to the rollout of new mobile devices? He began using the Apple iPad the day it came out.

"I have four Macs in my house," says Dennes. "When I came home with the iPad - and we now have two - those got consumed immediately. I carry my iPad around at work with me all day. I do not have a pen, a notebook or a laptop. This is how I interact."

Within USAA ($139 billion in assets), a San Antonio-based financial services provider to military personnel and their families, iPad use becomes more common every day, according to Dennes. All of the company's senior executives have been issued the device, and other employees are buying them on their own and paying for the data package out of their own pockets, he says.

At a recent morning staff meeting, "Everybody in the room had an iPad to take notes," Dennes relates. The device made the meeting more productive because one set of notes was produced, and action items were assigned then and there, rather than through follow up e-mails, he insists. (Although some say the virtual keyboard takes getting used to, Dennes claims he can type 40 to 50 words a minute on the iPad.)

"The iPad is such a rich device, it offers an experience that's second to none," he says. "It's a game changer, just like the iPhone was a game changer."

This is why Dennes' No. 1 work priority right now is the development of an iPad mobile banking application that's expected to launch later this year. "We'll make sure we have a very good application," he asserts. "We won't just take existing apps we have and port them over the way some of our competitors do. We want the iPad to be our best experience."

Three years ago, Dennes, a 10-year veteran of USAA (prior to joining USAA he was director of programs and projects at Capital Group), began creating a mobile banking channel for the organization. Under his watch, USAA was one of the first financial organizations to offer an iPhone app and one of the first to allow customers to deposit checks via the device.

"The true driver was a business scenario. We don't have branches, and therefore, in order to bank with us, customers could use anybody's ATM to get money out. But to get money in generally required them to mail money to us," Dennes explains. "That was the No. 1 barrier to people banking with us. So we took a competitive disadvantage and turned it into an advantage. Along the way, we want to be first to bring to market innovative solutions. We're definitely winning new customers because of our mobile deposit capability and overall mobile capability."

Is There Money in Mobile?

But can mobile be profitable for banks? Dennes points out that the mobile channel is the least expensive the company operates. "We were able to build that channel faster than any other," he says. "A lot of that is because of the channels we've already built. But as members use [the mobile] channel, there's no phone call coming in; yet at the same time, members can interact with us more frequently."

Among recent mobile innovations, Dennes' group has developed a secure four-digit PIN for USAA's iPhone and Android mobile banking apps to take the place of the user name, password and PIN that was formerly required. (Mountain View, Calif.-based VeriSign's Identity Protection Service identifies and helps authenticate incoming mobile devices.) "That was the biggest challenge for members - entering the user ID and password," Dennes says. "And the new authentication scheme is more secure."

On Aug. 4, USAA announced two new mobile applications for the iPhone, Android and Research In Motion's BlackBerry that are designed to assist car and home buyers through the buying, borrowing and insurance process. Auto Circle helps customers research, find, finance and insure a new car while at the car dealership, using their mobile phones. They can look up information about the car they're interested in, find the lowest price for the car and see the loan amount USAA will support for the vehicle.

"Members have reported feeling intimidated by going to an auto dealership and negotiating for a car; they didn't feel they were getting the best price," Dennes relates. "We've armed them with the ability to not only get the best price, but to research, finance and insure the new car while they're on the lot."

Home Circle provides the same type of research, loan and insurance capabilities for prospective homeowners. "That's not only a very intimidating experience, but it's usually one of the biggest financial investments of your life," observes Dennes, who notes that the app can be used by renters as well as buyers. "About 60 percent of our customers rent - they tend to move frequently when they're on active military duty," he says.

These apps have been integrated with all of USAA's other customer-facing banking and insurance applications, according to Dennes. "We have all of your banking, investments and insurance information right there on that mobile device," he says. "I don't know of any other financial institution that's been able to integrate all those products."

Fostering Innovation

It's not always easy for large organizations - USAA has 22,000 employees - to innovate. Bureaucracy and politics can get in the way. But Dennes claims that USAA offers a collaborative environment where employees and members are free to express and share ideas, including a LexisNexis social media community for younger IT staff, an innovation center of excellence and a research lab.

"I task that lab with looking at new technology and devices and how that would impact us," Dennes says. "We work closely with them when a new device is coming out and we think it will get adoption in the marketplace." Although he would not divulge what's in the lab right now, Dennes believes the next big thing is mobile payments.

"Payments are absolutely going to the mobile device," he contends. "When that happens is anybody's guess. But your wallet at some point will be in your mobile device."

While some bankers are spooked by security concerns around mobile payments, especially for contactless payments, Dennes is confident in his team's ability to find a solution. "Security is at the core of what financial institutions do," he says. "The fraudsters are always trying to figure out ways to compromise financial institution assets. But we're constantly working to make sure we make that a secure process."

Such determination to overcome obstacles and foster innovation is clearly a part of Dennes' character. But it's also part of the culture at USAA, he says. "It starts with the CEO and goes all the way through every troop we have," Dennes relates. "It's woven into the fabric of who we are."